Sacramento prosecutors win accolades for work in JP Morgan case

Three prosecutors and a former prosecutor in the U.S. attorney’s office in Sacramento were among a group of Justice Department lawyers honored Wednesday for outstanding work.

U.S. Attorney General Eric Holder bestowed the Award for Distinguished Service – the department’s second-highest honor for employee performance – on Assistant U.S. Attorneys David Shelledy, chief of the Sacramento office’s civil division, and Kelli Taylor and Colleen Kennedy, who work in the civil division; as well as Richard Elias, former assistant U.S. attorney in the civil division who is now in private practice in St. Louis.

The four were cited for their work, under the guidance of Shelledy and U.S. Attorney Benjamin Wagner, “that led to an unprecedented civil settlement with JPMorgan Chase,” the nation’s largest bank.

“The settlement negotiations and the (underlying) fraud investigations they undertook led to what was the largest settlement with a single entity in American history – $13 billion – and the largest … penalty ever recovered by the department – $2 billion” under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. The measure was enacted in response to the savings and loan crisis of the 1980s.

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The settlement resulted in part from an investigation showing that, in the lead-up to the 2007-08 collapse of the economy, JPMorgan sold billions of dollars of residential mortgage-backed securities which included loans that did not comply with underwriting guidelines, were secured by properties with inflated appraisals, were supported by inaccurate loan-to-value or debt-to-income ratios or were otherwise unlawfully originated, according to the citation.

All the while, the citation says, JPMorgan was “misrepresenting to investors the (high) quality of the loans … and the (low) risk of loss.” The efforts of the four award recipients held “wrongdoers accountable for reckless and abusive conduct that contributed to the financial crisis,” the citation says.

Wagner said Wednesday the four attorneys “exemplify what it truly means to be a public servant.”

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